Fixing the FCC, America’s Broken Regulator
Expected to evenly balance the demands of industry and consumers, some public interest critics of the Federal Communications Commission believe it veers too far into industry’s camp.
FCC Commissioner Meredith Attwell Baker announced earlier this month that she’s leaving the agency for a job as the senior vice president of government affairs for Comcast-NBC Universal. The decision wasn’t particularly surprising or even unusual. Public servants exit government all the time for K Street suites where their expertise is more profitable.
Baker’s timing, however, caused an uproar: In January, she voted to approve the merger of Comcast and NBC, creating the very company for which she’ll be lobbying later this summer.
Politicians and pundits denounced what looked like a particularly offensive case of a regulator bolting for the regulated. The New York Times‘ editorial page clucked its disapproval. Public interest groups began calling for an investigation, and Baker had to issue a statement defending herself against ethics charges.
“I have no doubt she dotted all her I’s and crossed all her T’s,” said Public Knowledge President Gigi B. Sohn. “She didn’t do anything illegal, and I don’t see any reason why there should be an investigation. But, be that as it may, it still looks terrible” — especially when spliced up by the Jon Stewart machine.
Baker’s greatest crime, as Sohn sees it, is that she took advantage of a bad system. And so her story speaks — more so than to anything about Baker personally — to a long-running priority of groups like Sohn’s: the need for extensive reform of the FCC.
The agency, helmed by a five-member commission, is frequently derided as broken by public interest groups that worry that it’s beholden more to industry than taxpayers. The regulator is structured in such a way that immense power is vested in the chairman of the commission (currently Julius Genachowski). The agency has long conducted much of its business off the record and away from public view, fueling decisions informed as much by politics as data.
And, as Baker’s case underscores, the agency suffers from an intimate relationship with the industry it regulates, one that Sohn believes could only be severed by a legislative ban on traffic between the two during a multiyear cooling-off period. (The Obama administration’s own ethics rules will prevent Baker from lobbying the FCC directly for the next two years — but she can start chatting up Congress as soon as she pleases.)
Public Knowledge last year published an outline of proposed reform of the FCC for the Internet age. “In almost all cases,” Sohn and Michael Weinberg wrote, “the types of reforms we suggest will involve a surrender of discretion by FCC leadership and a move away from unpredictable and ad hoc decision-making.” As such, the reforms will likely be hard to extract.
The agency’s revolving-door problems in particular have grown more troublesome as the FCC has evolved from its roots in the 1930s as a regulator of federal radio spectrum.
“Things have definitely gotten worse because of the money,” Sohn said. “Thirty years ago you could go work for a broadcaster or a telephone company. Now we’re talking about multinational media conglomerates, telecommunications conglomerates who just have money to burn. It’s worse now just because the stakes are so much higher.”
The chairman’s goal shouldn’t be — as Sohn says Genachowski has sought to do — to strike compromise between consumer interests and industry.
“I don’t think you ignore [industry], but it’s not about cutting deals,” Sohn said. “In any decision, some oxes are going to be gored, that’s just the way it is. Any FCC chairman’s goal should be more competition, lower prices, more innovation. And, more often than not, that’s going to gore the ox of the incumbent.”
That is, of the Comcasts and the AT&Ts.
“If you do that, if you regulate to promote competition and consumer choice, that means you’re favoring the little guy over the big guy, which ultimately favors the consumer,” she said. “This notion that somehow regulators shouldn’t favor anybody — no, you have to make choices, and somebody’s going to be happy and somebody’s going to be unhappy. The FCC is duty-bound by law to make the public happy, to make consumers happy.”
Sohn isn’t optimistic about many of these changes in the culture and procedure of how the FCC runs. Legislative limits on the revolving door, for instance, would depend on the votes of congressmen who dip into the same lobbying largesse.
Sohn is also conscious of the fact she doesn’t want to cry too loudly about the flawed system that paved Meredith Baker’s path to NBCU.
“You have to be careful, because if you just say, ‘Washington is hopeless and government is completely corrupt,’ then out of other side of your mouth say, ‘We want government to give us A, B and C,’ you’ve thrown everybody into the cynical camp,” she said. “So why should government do anything?”